ASX:AVJ

Stock Analysis Report

Executive Summary

AVJennings Limited engages in the development of residential properties in Australia.

Rewards

Trading at 81.7% below its fair value

Earnings are forecast to grow 4.47% per year

Earnings grew by 38.3% over the past year

Risk Analysis

Has a high level of debt

Unstable dividend track record

Highly volatile share price over past 3 months

Shareholders have been diluted in the past year



Snowflake Analysis

Undervalued with proven track record and pays a dividend.

Share Price & News

How has AVJennings's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: AVJ's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

11.0%

AVJ

6.4%

AU Real Estate

13.4%

AU Market


1 Year Return

-5.2%

AVJ

-12.0%

AU Real Estate

-18.8%

AU Market

Return vs Industry: AVJ exceeded the Australian Real Estate industry which returned -12% over the past year.

Return vs Market: AVJ exceeded the Australian Market which returned -18.8% over the past year.


Shareholder returns

AVJIndustryMarket
7 Day11.0%6.4%13.4%
30 Day-15.0%-34.4%-20.7%
90 Day-27.8%-35.9%-24.4%
1 Year-0.6%-5.2%-8.8%-12.0%-15.2%-18.8%
3 Year-10.6%-25.4%-24.7%-32.4%-2.8%-15.9%
5 Year2.4%-26.6%-15.4%-30.4%9.3%-15.3%

Price Volatility Vs. Market

How volatile is AVJennings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is AVJennings undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: AVJ (A$0.46) is trading below our estimate of fair value (A$2.48)

Significantly Below Fair Value: AVJ is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: AVJ is good value based on its PE Ratio (7.8x) compared to the Real Estate industry average (10.6x).

PE vs Market: AVJ is good value based on its PE Ratio (7.8x) compared to the Australian market (12.9x).


Price to Earnings Growth Ratio

PEG Ratio: AVJ is poor value based on its PEG Ratio (1.7x)


Price to Book Ratio

PB vs Industry: AVJ is good value based on its PB Ratio (0.5x) compared to the AU Real Estate industry average (0.7x).


Next Steps

Future Growth

How is AVJennings forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

4.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: AVJ's forecast earnings growth (4.5% per year) is above the savings rate (1.1%).

Earnings vs Market: AVJ's earnings (4.5% per year) are forecast to grow slower than the Australian market (9.7% per year).

High Growth Earnings: AVJ's earnings are forecast to grow, but not significantly.

Revenue vs Market: AVJ's revenue (5.3% per year) is forecast to grow faster than the Australian market (4% per year).

High Growth Revenue: AVJ's revenue (5.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: AVJ's Return on Equity is forecast to be low in 3 years time (5.9%).


Next Steps

Past Performance

How has AVJennings performed over the past 5 years?

-10.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: AVJ has high quality earnings.

Growing Profit Margin: AVJ's current net profit margins (6.7%) are higher than last year (5.7%).


Past Earnings Growth Analysis

Earnings Trend: AVJ's earnings have declined by -10.2% per year over the past 5 years.

Accelerating Growth: AVJ's earnings growth over the past year (38.3%) exceeds its 5-year average (-10.2% per year).

Earnings vs Industry: AVJ earnings growth over the past year (38.3%) exceeded the Real Estate industry -19.3%.


Return on Equity

High ROE: AVJ's Return on Equity (6%) is considered low.


Next Steps

Financial Health

How is AVJennings's financial position?


Financial Position Analysis

Short Term Liabilities: AVJ's short term assets (A$223.9M) exceed its short term liabilities (A$24.6M).

Long Term Liabilities: AVJ's short term assets (A$223.9M) do not cover its long term liabilities (A$227.2M).


Debt to Equity History and Analysis

Debt Level: AVJ's debt to equity ratio (45.1%) is considered high.

Reducing Debt: AVJ's debt to equity ratio has increased from 35.2% to 45.1% over the past 5 years.

Debt Coverage: AVJ's debt is well covered by operating cash flow (22.4%).

Interest Coverage: AVJ earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: AVJ has a high level of physical assets or inventory.

Debt Coverage by Assets: AVJ's debt is covered by short term assets (assets are 1.2x debt).


Next Steps

Dividend

What is AVJennings's current dividend yield, its reliability and sustainability?

5.93%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: AVJ's dividend (5.93%) is higher than the bottom 25% of dividend payers in the Australian market (3.22%).

High Dividend: AVJ's dividend (5.93%) is low compared to the top 25% of dividend payers in the Australian market (8.38%).


Stability and Growth of Payments

Stable Dividend: AVJ's dividend payments have been volatile in the past 10 years.

Growing Dividend: AVJ's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (46.1%), AVJ's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: AVJ's dividends in 3 years are forecast to be covered by earnings (68% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

10.7yrs

Average management tenure


CEO

Peter Summers

11s

Tenure

AU$1,037,031

Compensation

Mr. Peter K. Summers, BEc., CA has been the Chief Executive Officer and Managing Director of AVJennings Limited, a subsidiary of SC Global Developments Ltd. (formerly AVJennings Homes Ltd.) since February  ...


CEO Compensation Analysis

Compensation vs Market: Peter's total compensation ($USD638.76K) is above average for companies of similar size in the Australian market ($USD245.57K).

Compensation vs Earnings: Peter's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Peter Summers
MD, CEO & Director11yrsAU$1.04m1.25% A$2.3m
Larry Mahaffy
Chief Financial Officer7.25yrsAU$479.15k0.052% A$93.9k
Stenio Orlandi
Chief Operating Officer1.58yrsAU$485.40k0.12% A$219.1k
Carl Thompson
General Counsel & Company Secretary11.17yrsAU$545.87k0.38% A$689.9k
Lisa Hunt
General Manager of Human Resources10.67yrsAU$345.72k0.081% A$146.8k
David Lowden
Head of Corporate Communicationsno datano datano data
Chrishanthi Halliday
Assistant Company Secretaryno datano datano data

10.7yrs

Average Tenure

Experienced Management: AVJ's management team is seasoned and experienced (10.7 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Peter Summers
MD, CEO & Director11yrsAU$1.04m1.25% A$2.3m
Nee Wee Kim Choo Sam
Non-Executive Director18.42yrsno data0.055% A$100.0k
Teck Poh Lai
Non-Executive Director8.25yrsAU$64.50kno data
Sae Peng Cheong
Non-Executive Chairman14.42yrsno datano data
Boon Leong Tan
Non-Executive Director2.67yrsno datano data
Yoke Choong Chin
Non-Executive Director14.42yrsAU$72.00kno data
Bruce Hayman
Non-Executive Director14.42yrsAU$92.00k0.021% A$37.8k
Reginald Rowley
Non-Executive Deputy Chairmanno dataAU$126.00k0.067% A$120.3k
Philip Kearns
Independent Non-Executive Director1yrAU$22.22kno data

14.4yrs

Average Tenure

69.5yo

Average Age

Experienced Board: AVJ's board of directors are seasoned and experienced ( 14.4 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 4.3%.


Top Shareholders

Company Information

AVJennings Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: AVJennings Limited
  • Ticker: AVJ
  • Exchange: ASX
  • Founded: 1932
  • Industry: Real Estate Development
  • Sector: Real Estate
  • Market Cap: AU$180.773m
  • Shares outstanding: 406.23m
  • Website: https://www.avjennings.com.au

Location

  • AVJennings Limited
  • 108 Power Street
  • Level 4
  • Hawthorn
  • Victoria
  • 3122
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
A05SGX (Singapore Exchange)YesOrdinary SharesSGAUDFeb 1994
AVJASX (Australian Securities Exchange)YesOrdinary SharesAUAUDFeb 1994
AVJCHIA (Chi-X Australia)YesOrdinary SharesAUAUDFeb 1994

Biography

AVJennings Limited engages in the development of residential properties in Australia. It is involved in land and apartment development, and integrated housing activities. The company was founded in 1932 and is based in Hawthorn, Australia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/31 10:36
End of Day Share Price2020/03/31 00:00
Earnings2019/12/31
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.